Morgan Stanley: AI Capex Hits $1.58 Trillion, Powers a Quarter of S&P 500 Growth

S, according to Chaoxiang Research, a Morgan Stanley research report dated October 20, 2026 indicates that AI capital expenditure including leasing will reach $1.58 trillion in 2027 and $1.81 trillion in 2028; leasing expenses will be $195 billion in 2027; customer revenue from hyperscalers and emerging cloud providers will account for 5% of S&P500 total revenue in 2027, driving approximately 25% year-over-year growth; NVIDIA will capture roughly $690 billion, accounting for two-thirds of the S&P500's absorption.

Morgan Stanley assesses that AI capital expenditure growth decelerates from approximately 100% in 2026 to around 60% in 2027 and 14% in 2028, while absolute scale continues to rise, meaning S&P500 expansion is no longer solely dependent on AI. The report forecasts S&P500 revenue growth of 8.6% in 2027, remaining at 6.6% after excluding direct AI revenue. In terms of allocation, NVIDIA, Broadcom, AMD, Micron, Samsung, SK Hynix, as well as power and industrial suppliers, are poised to benefit. Risks to monitor further include deceleration in 2028 and power bottlenecks.